The regulators presiding over Boulder's application to separate from Xcel Energy in the interest of establishing a municipal electric utility gave some of the city's proposal partial, conditional approval Thursday, and denied the rest of it.

The order follows a nine-day trial that took place in Denver over late July and early August, and the application reviewed during that period was actually Boulder's third in two years; neither of the first two were accepted for trial.

Entering the hearings, Boulder set forth a request for approval of the transfer of Xcel assets within city limits.

Boulder also asked that the commission approve a separation plan, which spelled out the details of various proposed processes needed for a "safe, reliable and effective" split with Xcel.

The commission approved the asset list, excluding six substations included in the city's proposal. But that approval requires Boulder to satisfy three conditions:

• The filing of an agreement between Boulder and Xcel that allows Xcel to permanently place and access facilities in Boulder that it needs to serve its remaining customers

• The filing of a revised asset list that corrects "errors and omissions" from what was originally submitted

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• The filing of an agreement, or multiple agreements, between Boulder and Xcel addressing the city's payment to Xcel for costs the company incurs facilitating separation

Regulators have asked that the city submit those filings within 90 days, though Boulder will have the opportunity to request an extension, if needed.

The exclusion of substations from the conditionally approved asset list means that Boulder would either have to build its own substations or reach an agreement with Xcel on use or acquisition of theirs. The city says it has already initiated talks with Xcel about such an agreement.

The commission has ordered Xcel to act in "good faith" with Boulder to satisfy those conditions and move ahead to the extent that the written ruling allows.

By partially and conditionally approving the asset list, the commission allows Boulder to continue pursuing municipalization — for now, at least. The city can move ahead toward a proceeding in condemnation court, where the price tag of Xcel's local assets will be set.

The voter-approved limit for city spending on condemnation is $214 million.

On top of that, engineering work needed to do detail system design is expected to cost up to $4 million, and separating the current Xcel system in Boulder from the one the city would operate could cost north of $70 million.

Boulder officials said on Aug. 31, the day after the unofficial deliberations, that they perceived a "clear path forward" from the commission, and that city staff members were "already at work" on next steps.

But the portion of the application that the commission denied contained many of the key elements of Boulder's proposed plan, which likely make a revised path more expensive for the city.

That's due in large part to the fact that Boulder thought Xcel should be responsible for designing, financing and constructing the separation. The commission disagreed, but, more importantly, felt it did not have the jurisdiction to approve that request anyway.

The commission took the same approach to Boulder's request that it be allowed to share use of power poles with and engage with the company in co-location of certain facilities, under a future city-run utility.

Boulder had also proposed a four-phased approach moving forward, much of which the commission disagreed with. So, while the commission set forth a much different plan than the one the city advanced earlier this summer, the city's "path forward" — however murky it may prove to be — will be less complex in at least one sense, given the commission's rejection of a phased approach that may have lengthened the process.

Meanwhile, IBM had requested to be left out of the service area of a potential city utility, because the company does not trust that Boulder can provide reliable service to its Gunbarrel campus. The commission denied IBM's request.

During the August deliberations, the commissioners noted that they perceived many flaws with Boulder's application, but that they wanted to leave the city with options to pursue its constitutionally guaranteed right to municipalization — something the city's been trying to capture for seven years.

The commission chairman, Jeff Ackermann, did say, however, that the constitutional right is not necessarily "unlimited."

After the written order's release, Xcel — which opposed Boulder's application and recommended outright denial — issued a statement supporting much of the ruling.

The company "appreciates the commission's thoughtful approach to separation and its agreement with several key aspects of the company's advocacy," read the statement, which added that Xcel "affirms its commitments to work with the city on the 'next steps' as laid out by the commission."

Boulder also released a statement, which reaffirmed the city's post-deliberation statement that the commission had created a path forward for municipalization.

"The city will conduct a thorough analysis of the financial and timing implications of the ruling over the next few weeks; however, in its initial evaluation, it does not appear that the order significantly alters either the timeline or the overall cost of municipalization," the statement read.

Boulder acknowledged that the commission's ruling presents "some challenges," but stated, "This is a positive outcome for the city."

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